Speaking at the Annual General Meeting, Ratan Tata, Chairman Tata Engineering and Locomotive Company Ltd. (Telco) stated that there were signs of revival in demand for steel and commercial vehicles. Mr. Tata described the last financial year as the worst the company had witnessed since the economic slowdown hit the Indian industry in the latter half of 1996.
The competition in the automobile industry is likely to hot up in the coming months. This will put a lot of pressure on Indian manufacturers to deliver a wide range of quality products that are priced reasonably. In this context Mr. Tata stated that Telco was open to the idea of entering into alliances with international majors. This would give it access to new products while at the same help it to improve the quality of its products. Telco is also open to the idea of product exchange.
The Indica plant, which has been witnessing some teething troubles, is likely to stabilise at a monthly production level of 5,000 nos. September onwards. Telco, which has sold 14,000 Indicas till 31st July, is likely to meet the 60,000 nos. sales target for the current financial year.
Telco has been suffering on the export front because of the relatively cheaper exports from the South East Asian economies. Despite this, it has set itself an export target of Rs 7 bn, up 40% from the last year.
Telco is also stepping up its expenditure on upgradation to Rs 6 bn per annum. The expenditure is necessary to improve production efficiency and at the same time enable Telco to produce better quality cars.
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